Among Redfin’s many useful datasets, bidding wars is of particular note in this market where sellers have had the upper hand for a long time. It only measures whether Redfin real estate agents faced at least one competing bid on their offers, but it’s a good proxy for the market overall. As the chart shows, there were bidding wars on almost three-quarters of home offers in April, and now that’s down to 59%.
Fifty-nine percent is still quite high, but all markets are local and if you view the full Redfin post below, you can sort the city table by highest and lowest percent of bidding wars to see where conditions are more favorable.
The top five most buyer-favorable cities right now are Oklahoma City, Sarasota, Richmond (VA), Milwaukee, and Charleston (SC). This is where the percentage of bidding wars is lowest.
The top five toughest markets for homebuyers right now are Raleigh (NC), San Francisco (and San Jose), Tucson, Cincinnati, and Salt Lake City. This is where the percentage of bidding wars is highest.
The full post has the percentages and the full city list.
BIDDING WAR PRO TIPS FOR HOMEBUYERS:
– This is national data from one real estate firm. It’s a signal for the market but not the market itself.
– Bidding war probability goes all the way down to the neighborhood, street, and individual property level.
– So don’t get discouraged by “persistent bidding war” headlines because that sells clicks. It doesn’t mean a seller won’t accept your offer.
– One critical way to win bidding wars is making sure your loan pre-approval is as solid as it can be. Some lenders look at your employment, income, assets, and credit report quickly and tell you to start writing offers.
– But YOU MUST PUSH YOUR LENDER for a granular pre-approval that either includes ALL of your actual documentation that you’ve submitted, or actually has the lender’s underwriter review and issue a conditional approval on the loan.
– Sometimes lenders won’t do conditional underwriter approvals for home purchase loans, which means that your pre-approval is based on your loan officer eyeballing the file instead of actually getting their underwriter to review the file. They do this to limit underwriters from spending time on loans that might not close. But you need to push your lender here, or find a lender that does do underwriting pre-approvals.
– These are called “TBD Approvals” in lender lingo, because the borrower part of the file is approved (with conditions), and the final approval is based on a property “to be determined” that also must be approved.
– The good thing about TBD Approvals or underwriting pre-approvals is that they enable you to compete with cash buyers.
The full Redfin post is below, and hit me or comment below with any bidding war or pre-approval questions.
Competition is easing as homebuyers grow tired of sky-high asking prices and the housing market enters its typical seasonal slowdown.
In August, 58.8% of home offers written by Redfin agents faced competition—a record low for 2021. That’s down from a revised rate of 62.1% in July and a peak of 74.3% in April. It’s also slightly lower than the August 2020 bidding-war rate of 59.4%.